We all know that there are, in reality, just 3 Groups in EU and LH is one of them If there were other bidders except the usual bigmouth, they woud have shown up.There is also an Explanation why U2 seems to be a bit reluctant and that is Monarch. Just across the street at Luton and here the questio is, how much can U2 handle? Here the lower bid could make sense. It is not only the purchase Price but also the Support until the the operations make Money.

LH can finance the Transaction from their own financial resources. No other carrier outside the EU3 is in that Position. Simple fact.

True, and in particular, U2 does not have the kind of money that would allow it to be as opportunistic as LH is able to be.

Money makes money, same as always.

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LH Group has a market share of 14% in Europe, hardly dominant and so there can't be an argument for lack of competition within Europe. As to domestic traffic: Germany is a tiny Country. Not too many worthwhile domestic routes apart from connection to long haul. The competition, expectedly, is rail and car, even long-distance busses now. Hence a worthwhile comparison is not market share at airports, but market share of total travellers between domestic city pairs. Plenty of competition in that field.

If one looks out of the box a bit more, there is a clear LH-group-dominance in market share between Germany, Austria and Switzerland now. Rail and road are weak competitors say between Vienna and Zürich/Geneva or Vienna and places further away than Munich or Frankfurt. Except VIE - GVA and VIE - BER (SXF & TXL) no other airlines than LH-related ones come to my mind. Austria and Switzerland therefore should have a very close look at that LH-AB-deal!

Last edited by redcap1962 on Thu Oct 12, 2017 12:15 pm, edited 1 time in total.

LH didn't "buy" AB, it's picking up the pieces it wants (presumably at an acceptable price) and leaving the rest behind (presumably for others to fight over or for them to be washed away by insolvency).

LH is taking up more than 80% of Air Berlin. That's much more than just picking pieces / cherry picking.

Absolutely the right outcome. The most AB jobs being protected; LH Group retains its market dominance...which I deem necessary for a stabilized EU aviation sector...fewer creditors getting shafted; better job stability and growth opportunities for existing LH staff. Deregulated markets have caused significant wealth extraction for workers, investors, and communities of said industrties and industry consolidation returns some long needed stability.

If one looks out of the box a bit more, there is a clear LH-group-dominance in market share between Germany, Austria and Switzerland now. Rail and road are weak competitors say between Vienna and Zürich/Geneva or Vienna and places further away than Munich or Frankfurt. Except VIE - GVA and VIE - BER (SXF & TXL) no other airlines than LH-related ones come to my mind. Austria and Switzerland therefore should have a very close look at that LH-AB-deal!

There are others, GVA-MUC has competition. EW gave up on HAM-GVA also served by easyJet. HAM-ZRH also flown by U2 (ends in March though), ZRH-BER (U2 to SXF, LX to TXL).

The thing is though, you compare those routes U2 run these routes at a significant schedule disadvantage (most of these are only 1 daily or less). U2 does however dominate BSL-HAM/SXFwhich are flown with high frequencies (and BSL-DRS) but none of these 3 routes have any competition.

It really comes down to the weakness of easyJet in Germany (if you except Berlin) but also their use of an inferior airport for business travel in Berlin. Gaining access to TXL could change their network in Berlin and make them a lot more competitive on the business routes whilst keeping SXF for leisure or routes without competition.

All done at a time when Train services have shown to be a poor alternative to air travel in Germany.The route to Basel has been closed for two months and the train tracks up north out of action for many days after the storms last week.

Companies do not exist for the benefit of their employees.The regulators in Germany should never have allowed this.

The only people who can be happy about this outside of the employees in the failed companies are the fernbus operators.

....if TXL stays open.which has to be seen. Berlin's stupid single Airport strategy which is topped by the capping of frequencies at the future single Airport BER to 360000 p.a. is a far greater threat of higher air fares than a few Monopoly routes. But no one complains, the issue is not public I doubt hat U2 will fill ABs few Slots on FRA SXF and why does O'Leary not use a couple of his newly won Slots for flying FRA HAM? Could it be that they do not like flying cabotage in Germany because the DA could raid their Offices to check on hiring conditions of pilots?

....if TXL stays open.which has to be seen. Berlin's stupid single Airport strategy which is topped by the capping of frequencies at the future single Airport BER to 360000 p.a. is a far greater threat of higher air fares than a few Monopoly routes. But no one complains, the issue is not public I doubt hat U2 will fill ABs few Slots on FRA SXF and why does O'Leary not use a couple of his newly won Slots for flying FRA HAM? Could it be that they do not like flying cabotage in Germany because the DA could raid their Offices to check on hiring conditions of pilots?

It's not cabotage seeing that the EU itself is a single market.......

And whether or not an airline like U2 or FR flies domestic has nothing to do with them being raided - you have a base in a country in Europe you need to follow local hiring laws.

Besides FR has already flown domestic German routes (e.g. CGN-SXF).

They key is really that until now AB was good competition to LH domestically, LCCs had limited access to slots at the big airports. This is about to change, but then the 1000 pound gorilla is now becoming a 1500 pound one making it all the more difficult for anyone to compete.

If FR believe they can make money on say FRA-HAM (FRA-SXF would be tougher to compete on until BER becomes the single airport), then FR will fly it.

If U2 gets part of AB in TXL, then I suspect we will see TXL-MUC/FRA/DUS/CGN + ZRH/VIE/LGW/CDG plus whatever is left to key easyJet airports (MXP, GVA, BSL, etc...).

@ runway23 - even in a single market operations within a member countries boundaries are cabotage. Not only in aviation but also in trucking. It goes as far that a Polish truck Driverdriving from Berlin to Munich must be paid German Minimum wage, which might be more than a Ryanair Pilot with a Zero hour cntract makes. The difference between then and now is that now it is legal. Provided the laws are honored.

Now, what happens to all the routes which have been served by EW and AB? Very simple, any ECAA carrier can step in and fly These routes.are up for grabs. The LH CEO said in an interview that if AB had failed uncrontrolled, LH would have gained most of the newly to be allocated Slots anyhow. We have rules and regulations but the market itself is not regulated. It is not Lufthansas Problem when no other carrier wants to compete with them pn any given route and no commission can force a carrier to compete with LH.

If easyJet get nothing and LH/EW everything then something is deeply wrong here...

easy Jet takes Air Berlin Technik, but it's just a small part...

Please provide a source. I work for ABT and we heard nothing about this, nor have we seen anything about this. What part do they take ? Line station TXL at a guess ?

I do not think there will be any confirmation until the bids for Air Berlin Technik are opened (scheduled for Monday 16th Oct).It does actually make sense for Easyjet to secure an MX base inside the EU to minimize the possible disruption to their operations if the Brexit talks go really bad.

“Nations have no permanent friends or allies, they only have permanent interests.”

@ runway23 - even in a single market operations within a member countries boundaries are cabotage. Not only in aviation but also in trucking. It goes as far that a Polish truck Driverdriving from Berlin to Munich must be paid German Minimum wage, which might be more than a Ryanair Pilot with a Zero hour cntract makes. The difference between then and now is that now it is legal. Provided the laws are honored.

Now, what happens to all the routes which have been served by EW and AB? Very simple, any ECAA carrier can step in and fly These routes.are up for grabs. The LH CEO said in an interview that if AB had failed uncrontrolled, LH would have gained most of the newly to be allocated Slots anyhow. We have rules and regulations but the market itself is not regulated. It is not Lufthansas Problem when no other carrier wants to compete with them pn any given route and no commission can force a carrier to compete with LH.

I think your example does not stick. There is actually complaints about, that some EU trucking companies, for example Polish companies driving in Germany, are not paying German minimum wages while moving freight in Germany. It matters were the place of employment is, in Germany or Poland. The German minimum wage, being EUR 8.84, is anyway nothing to scream about.You can drive from Warsaw and bring a load to Hamburg, take a load from there to Munich and the next load from Munich to Poznan. Nobody will talk about minimum German wage, but your German competition. When you put up a dependence in Hamburg and you start trucking Hamburg - Munich, than you get hit with German minimum wage.

iirc there is just a single relation where taking over AB leads to a monopoly and that is MUC-CGN.

best regardsThomas

What about all the other routes out of DUS and TXL where both EW and AB competed ?

It's not just the direct routes. It also kept LH Group honest on plenty of connecting flights, where there will be no reasonable alternatives anymore

I can understand the loss of competition on direct flights mainly inside of Germany, but connecting flights? In connecting flights you have heaps of competition. You do not have to take LH trough MUC and FRA or EW trough DUS and CGN. You can go SAS or KLM or BA etc in most cases to reach the same destination.

@ mjoelnir - well, German Customs has a different opinion on that and theirs is relevant. The other question is, can that be enforced and the answer is : diffficult.

LH paid about € 210million for the deal which enables the Administrators of AB to fully repay KfW Bank, including costs and interest. LH will be resonsible for keeping AB flying from the date the contract becomes effective.should be Oct 28th.Nice Profit for the KfW Bank, that's the way to do it

What about all the other routes out of DUS and TXL where both EW and AB competed ?

It's not just the direct routes. It also kept LH Group honest on plenty of connecting flights, where there will be no reasonable alternatives anymore

I can understand the loss of competition on direct flights mainly inside of Germany, but connecting flights? In connecting flights you have heaps of competition. You do not have to take LH trough MUC and FRA or EW trough DUS and CGN. You can go SAS or KLM or BA etc in most cases to reach the same destination.

Same week flights from STR to HAM or VIE are ones I have done, where direct was at least twice the price. Yes you could go STR-LHR-HAM, but it's not exactly viable. The takeover of Air Berlin means there are less non-LH options and that can only be good for LH and bad for the customer.

In the moment it is difficult to define what LH bought. They bought parts of Air Berlin that included 81 airplanes and 3,000 of 8,000 staff according to the article. That leaves some frames and Air Nikki and LGW, frames belonging to LGW seems to be included in the 114 frames of Air Berlin.Another question is if LH bought Air Berlin PLC that owns Air Berlin or only parts of Air Berlin itself. What about the Maintenance section and so on. Are all airlines Air Berlin bought integrated in Air Berlin or owned separately by Air Berlin PLC?It seems that there is something left for EasyJet to buy according to the article.

The 81 Aircraft is Niki, LGW and the already wet leased 37 or 38 Aircraft flying for Eurowings and Austrian i believe. Air Berlin Technik is a separate entity, and although it had to file for insolvency because it’s only customer was Air Berlin, it is in fact profitable in its own right. The interesting thing is LH said it has no interest in expanding its own Technik. Air Berlin Technik has the contract for the wet lease Aircraft for six years. This can change of course if It shuts down, but the time for investors or buyers for Technik runs until the end of this week. Then negotiations will start, if we can believe our Management of course !

There were 114 aircraft registered to Air Berlin including LGW, excluding Niki, that includes only 5 A330-200. There are 16 frames registered to Niki, + 2 with non Austrian registration, that would make it 130 or 132 all together. So 81 frames leaves out quite a bit. Take away LGW, 20 Dash8-400Q, Niki, 16 frames, that still leaves 96. 96 minus 81 are still 15 frames.Something must be bought by somebody else or returned to lessor.

114, take away the 20 LGW, leaves 94. Of these, LH is -apparently- taking 20 A320, therefore competitors can get the remaining 74. Several planes will likely come of lease and I expect LH to grap some more capacity after AB shuts down. Lufthansa is paying 210 mio. €, of which 150 mio. are to repay the government loan.

1. they had the chance to plan the insolvency2. FR lacks the pilots to use the new slots, so they have little motivation to fight for them3. U2 had option in the UK with the end of Monarch, that are more interesting that what AB had to offer (same with Thomas Cook)

1. they had the chance to plan the insolvency2. FR lacks the pilots to use the new slots, so they have little motivation to fight for them3. U2 had option in the UK with the end of Monarch, that are more interesting that what AB had to offer (same with Thomas Cook)

4. LH has a lot more money than U2/TCX5. Brexit has killed the GBP/EUR exchange rate so U2/TCX have less buying power in Europe vs UK

The gun is NOT a precious symbol of freedomIt is a deadly cancer on American societyThose who believe otherwise are consumed by an ideologyThat is impervious to evidence

One of the rumours I recently heard is that long haul Eurowings will be started/developed on the AOC of Brussels Airlines, with German crew and bases (ex-AB?). This would eventually supersede the co-operation with SunExpress, who currently flies Eurowings Long Haul.If this turns out to be true, it's highly likely that at least the long haul destinations will become part of the Star Alliance network.

30-40 aircraft is enough of a subfleet to be worthwhile but aren't all of AirBerlin's 320s CFM powered? United's seemed to be content to stick with IAE birds when they've gone shopping for Airbus additions.

30-40 aircraft is enough of a subfleet to be worthwhile but aren't all of AirBerlin's 320s CFM powered? United's seemed to be content to stick with IAE birds when they've gone shopping for Airbus additions.

I guess at the right price they would see benefit in a sub fleet of CFM powered jets. Much like the mixed fleet of 757. United could source the birds from anywhere. Could even be some of the Monarch birds. But they’re are about to make a move on some, so will keep an eye on it.

Last edited by flyguy84 on Thu Oct 12, 2017 5:41 pm, edited 1 time in total.

30-40 aircraft is enough of a subfleet to be worthwhile but aren't all of AirBerlin's 320s CFM powered? United's seemed to be content to stick with IAE birds when they've gone shopping for Airbus additions.

I guess at the right price they would see benefit in a sub fleet of CFM powered jets. Much like the mixed fleet of 757. United could source the birds from anywhere. Could even be some of the Monarch birds. But they’re are about to make a move on some, so will keep an eye on it.

LH Group has a market share of 14% in Europe, hardly dominant and so there can't be an argument for lack of competition within Europe. As to domestic traffic: Germany is a tiny Country. Not too many worthwhile domestic routes apart from connection to long haul. The competition, expectedly, is rail and car, even long-distance busses now. Hence a worthwhile comparison is not market share at airports, but market share of total travellers between domestic city pairs. Plenty of competition in that field.

I would love to see their market share in Stuttgart. Germanwings, Eurowings, Austrian, Swiss, SunExpress, Air Berlin. It's all just LH in disguise

I figure you did not comprehend what I said - maybe my sentence "Hence a worthwhile comparison is not market share at airports, but market share of total travellers between domestic city pairs." wasn't clear enough?

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Not sure where so many take their fear of a lack of competition from.a worthwhile comparison is not market share at airports, but market share of total travellers between domestic city pairs. Plenty of competition in that field.

The first statement is correct. The second is not. You will find plenty of statistics posted about that in the "insolvency" thread, I will not repeat them. The "plenty" competition on those routes was only AB.

Not sure either if you did comprehend what I wrote. And yet again, maybe my fault in wording it improperly. But I specifically said RAIL and CAR and LONG DISTANCE BUSSES. Air Berlin did not operate either of those modes of transportation. Hence, the "plenty" of competition I spoke of couldn't have been Air Berlin only. But OTHER MODES OF TRANSPORTATION.I understand this is an aviation forum, but seriously people - there's other things than aviation.

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I also think that we should look at EU as one big aviation market. Not just each airport separately. In that respect, Ryanair would also have many quasi monopolies (Weeze, Beauvais, Brussels-Charleroi, Paris-Beauvais, Frankfurt-Hahn, etc)

Now the multi $$$Billion question, How many years it takes to negotiate with unions to effectively integrate AB into the group.

Congratulations for taking over the remaining non-LH Group owned major Central European airline? Glad for some of the AB staff, yet they would've got jobs with another suitor if the regulators hadn't let LH waltz in almost unopposed....

30-40 aircraft is enough of a subfleet to be worthwhile but aren't all of AirBerlin's 320s CFM powered? United's seemed to be content to stick with IAE birds when they've gone shopping for Airbus additions.

I guess at the right price they would see benefit in a sub fleet of CFM powered jets. Much like the mixed fleet of 757. United could source the birds from anywhere. Could even be some of the Monarch birds. But they’re are about to make a move on some, so will keep an eye on it.

It is also 30-40 planes all from the same source (which mean they should all basically be identical), which helps. Different than picking up a couple of used planes from various airlines with differing configurations and options outside of just the engines, in which case UA may want to keep engines the same so there is one less difference they have to worry about. Of course UA has plenty of CFM56 experience due to their huge 737 fleet.